II. 1. Value in the market
(i) Market knowledge
Value is related to cost, in so far as different production
units in the same locality producing the same item will have similar costs, and
sell the product at similar prices. Hence the market accepts that a particular
product will be sold within a certain price range. Where selling overseas, the
producer might well experience competition from handicrafts which are being
produced in other countries at lower cost; this is a fundamental problem with
Value is also related very closely to utility, and in this
respect handicrafts find themselves in competition with non-handicraft items.
The introduction of machines, and synthetic fibres, have brought down production
costs world wide, although the process has been balanced by much higher wages
rates in industrialized economies. Thus handicrafts are caught in a dilemma:
their own production costs are rising all the time, yet machine-made products
serving a similar purpose are decreasing their value.
This trend is not reversible, so that in the long term market
forces will reduce the scale of the handicrafts industry to well below what it
is now. The immediate concern, though, is to maximize earning opportunities in
the industry as it is at present. The point to consider is not the negative one
about long-term trends, but the relevance of market forces in price
determination. This is why it is useful to pause to consider the factors other
than cost which determine price.
In order to analyze these effectively, it is absolutely
necessary to refer to the market in which the product is being offered for sale.
Two things need to be known:
· what level of acceptability will the products
have in that market? Do people there want this type of item?
· which other products in competition with them are
available in that market?
From answers to these can begin an understanding of the value of
the products in the target market, and hence the price they will attract. It is
quite normal that the same product will have a different value in different
markets. For example, a heavily decorated woven basket produced only in one
rural locality might fetch a low price in the local market because it is
perceived only as a utility item, and many other similarly useful baskets are
available. In the capital city, or overseas, it might be appreciated as an
unusual and beautiful product, and accorded a high value for its decorative
aspect. By contrast, many products may not be saleable outside of the production
locality because other areas have access to similar products, or products
performing the same function, at a lower price.
(ii) Increasing the value
Utility to the consumer, and competition from other products,
are not the only factors influencing the market's perception of value. It is
encouraging to note that while competition pushes prices down, other factors can
push them up. Essentially, these can well be summed up under the heading
presentation, and include labelling,packaging, display and promotion.
Production units should always look for opportunities to
increase the value of their products. Often a small additional costan
attractively printed label, eyecatching packagingcan increase value by a
greater amount than the cost. Overseas markets are particularly responsive to
packaging. There are examples of products sold in Europe and Americasuch
as cosmeticswhere the packaging increases the value by many more times
than its cost. Handicrafts producers can take advantage of this fact. For
example, packaging spices or soap in small baskets, themselves costing very
little, might immediately give the product acceptability in the gift market, as
opposed to the self-purchase utility market, and thereby increase its value
Attractive display of productsin a bazaar, a shop, or a
sales cataloguecan increase a product's value. Generally, the more
sophisticated the market into which a business is selling, the more scope there
might be for increasing value through presentation. Metropolitan consumers will
have less knowledge than local ones about production costs, and more interest in
how a product looks in its place of sale.
(iii) The artisan's income
One of the major difficulties faced by artisans the world over
is lack of access to a market. The reality of their life is not how to turn
market characteristics to their advantage, but how to survive on a hand to mouth
basis. Lacking capital and knowledge about how to sell their products, they are
often exploited by the local trader because of their desperate need for cash.
Organization of social production units can make a significant
impact on an individual artisan's life. Aside from the important social benefits
obtainable through participation in an income-generation activity, the artisan
might derive vital financial advantages:
· access to credit at fair rates, or supplies of raw
material of which the cost is offset against the remuneration for production,
offer an alternative to a bank loan or to the money lender, at high rates of
· the possibility of regular work can remove the need to
take a day off each week to sell what has been produced in the local market
· instead of depending on the local trader, the artisan can
move one step forward in the distribution chain, selling through the unit to
perhaps the same customer as the trader. The profit margin saved by removing a
link from the distribution chain should to some extent be translated into higher
prices for the artisan.
The unit cannot obtain higher prices than the value accorded to
the products by the market in which it sells. For the artisans, though, this
would represent a new market opportunity, through which the products would gain
for them an increased